Blue House rebuts PPP accusations that Lee exploited legal loophole in home sale
The presidential office says Lee Jae Myung sold his Seongnam apartment below market value and charged no interest, rejecting opposition claims that he exploited a legal loophole.
President Lee Jae Myung speaks during a meeting held at the Blue House in central Seoul on July 22.NEWS1
The Blue House on Wednesday dismissed allegations by the main opposition that President Lee Jae Myung intended to pocket financial gains through a recent sale of his apartment in Seongnam, Gyeonggi.
Lee recently sold his apartment in the Bundang area of Seongnam, Gyeonggi, for 2.9 billion won ($1.96 million). The sale registered a mortgage lien in his and his wife's names with a maximum secured amount of 1.77 billion won.
A mortgage lien secures current and future debts up to a predetermined ceiling, and allows the original seller to retain a security interest in the property until the outstanding balance is repaid.
“If the final payment is deferred by several months, the amount is typically large enough that the interest would also be substantial,” Ahn Gwi-ryeong, deputy presidential spokesperson, said on the presidential YouTube channel on Wednesday. “We’ve confirmed that the president decided not to charge any interest."
The remarks appear to counter the opposition’s accusations that likened Lee to a “malicious moneylender.”
“The apartment complex in question is located in a first-phase redevelopment district designated under the Yoon Suk Yeol administration, and membership rights become nontransferable once the homeowners' association is formed,” Han Moon-do, an adjunct professor at Myongji University and a left-leaning real estate expert, said on the YouTube show. "Viewed in that context, it appears the president structured the sale with the buyer in mind. It appears to be a generous gesture from Lee.”
Ahn Gwi-ryeong, left, deputy presidential spokesperson, appears on YouTube show on July 22.SCREEN CAPTURE
The Blue House has repeatedly said the sale was not a transaction of self-interest.
“The property had been the couple's only home and primary residence for 28 years,” the presidential office said Tuesday. “Lee sold it below market value and gave up expected redevelopment gains to demonstrate his commitment to stabilizing the housing market. The mortgage was established transparently based on a civil agreement between the parties to the transaction.”
The Blue House said the transaction was handled through a standard real estate brokerage and dismissed claims that the buyer had any personal or special relationship with the president.
The buyer offered a similar explanation in an interview with the Kukmin Ilbo daily on Tuesday.
“House sales with mortgage liensare a common and legitimate practice in apartment complexes undergoing redevelopment," the buyer said. "To complete the purchase, I first needed to sell my current home. The president took my situation into account because of the redevelopment regulations."
A certified copy of a real estate register shows a mortgage lien set at 1.77 billion won ($1.2 million) in a transaction, in which President Lee Jae Myung sold his apartment unit in Seongnam, GyeonggiSCREEN CAPTURE
The buyer added that such arrangements were common throughout the apartment complex and were not a special case.
“It is unavoidable for those seeking to retain redevelopment association membership,” the buyer said.
The conservative People Power Party (PPP) criticized the transaction as "abnormal" and accused Lee of exploiting a legal loophole.
“Even interest-free loans between parents and children are treated as abnormal transactions and subject to tax investigations,” PPP leader Jang Dong-hyeok said. "If this is allowed, there would be virtually no limit to disguising gifts as loans."
The apartment complex where President Lee Jae Myung formerly resided in Seongnam, GyeonggiJOONGANG ILBO
PPP floor leader Jeong Jeom-sig referred to the sale as a "bizarre apartment sale on credit secured by the seller's own mortgage," describing it as "a textbook example of a loophole."
Senior PPP spokesperson Park Sung-hoon said Lee had effectively acted like a private moneylender by extending a loan worth hundreds of millions of won to maximize real estate gains.
Seoul Mayor Oh Se-hoon framed the controversy as a policy failure instead of blaming Lee personally.
"There are 10 million Seoul residents, and there are 10 million different circumstances," Oh wrote on his social media. "The president has instead demonstrated firsthand just how abnormal the current real estate regulations have made the market. If even the president has to devise this kind of method just to sell a single home, what clearer evidence could there be that the regulations have failed?"
He also argued that while the president had options, prospective first-time homebuyers constrained by the government's 200 million won mortgage cap had none.
People Power Party chief Jang Dong-hyeok, right, speaks at the National Assembly in western Seoul on July 21.NEWS1
The ruling Democratic Party (DP) dismissed the opposition's criticism as "false propaganda.”
“It's shameless for the PPP, whose members each own two or three homes, to baselessly attack a president who sold his only home at a loss,” DP Supreme Council member Hwang Myeong-seon said. “The PPP’s behavior goes beyond hypocrisy.”
Another DP Supreme Council member, Kang Deuk-gu, said Lee sold his sole residence for 2.9 billion won, less than its market value, and forfeited the profits he could have made once the area is redeveloped.
"The PPP should immediately stop its baseless attempts to smear the president," Kang said.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
